After emerging from bankruptcy protection in mid-December 2010, AbitibiBowater, one of the world’s largest newsprint manufacturers, has reached a binding agreement to sell its 75 percent interest in ACH Limited Partnership. As part of the transaction, the Caisse de dépôt et placement du Québec has also agreed to sell its 25 percent interest in ACH.
The agreement values ACH’s hydro assets, which have a combined capacity of approximately 131 MW, at approximately $640 million.
The sale, to a consortium formed by a major Canadian institutional investor and a private Canadian renewable energy company, is expected to generation around $300 million for AbitibiBowater. Most of the proceeds will be used to pay down company debt.
“We are looking forward to the completion of this transaction. Our intention is to immediately apply $100 million of the proceeds from this sale to reduce company debt,” stated Richard Garneau, President and Chief Executive Officer of AbitibiBowater. “We intend to protect the cost structure of the Iroquois Falls and Fort Frances mills and remain committed to reducing costs.”